Vast Resources plc. (Incorporated and registered in England and Wales with company number )

Transcription

1 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this document or the action you should take, you should immediately consult your stockbroker, bank manager, solicitor, accountant or other independent professional adviser authorised for the purposes of the Financial Services and Markets Act 2000 who specialises in advising on the acquisition of shares and other securities before taking any action. The whole of this document should be read. If you have sold or transferred all of your Ordinary Shares on or before the Record Date please forward this document as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other party through whom the sale or transfer was effected for transmission to the purchaser or transferee. Such documents should, however, not be forwarded to or transmitted into any jurisdiction outside of the UK if to do so would constitute a violation of the relevant law and/or regulations of such jurisdiction. Any failure to comply with such restriction may constitute a violation of the securities laws of any such jurisdiction. If you have sold or transferred only part of your registered holding of Ordinary Shares on or before the Record Date, you are advised to consult your stockbroker, bank or other agent through whom the sale or transfer was effected. This document does not comprise a prospectus in accordance with the Prospectus Rules and has not been drawn up in accordance with the Prospectus Rules. This document has not been approved by the Financial Conduct Authority or by any other authority in any jurisdiction. The Company s Ordinary Shares (including the Tranche I Shares and the Additional Financing Shares) are currently admitted to trading on AIM. AIM is a market designed primarily for emerging or smaller companies to which a higher investment risk tends to be attached than to larger or more established companies. AIM securities are not admitted to the Official List. A prospective investor should be aware of the risks of investing in such companies and should make the decision to invest only after careful consideration and, if appropriate, consultation with an independent financial adviser. Neither the London Stock Exchange nor the UKLA has examined or approved the contents of this document. The AIM Rules are less demanding than those of the Official List. It is emphasised that no application is being made for admission of Ordinary Shares to the Official List. Vast Resources plc (Incorporated and registered in England and Wales with company number ) Subscription of up to 5.0 million by Crede Capital Additional Financing of 0.5 million made by the Managers Issue of Associated Warrants Notice of General Meeting You are recommended to read the whole of this document but your attention is drawn, in particular, to the letter to Shareholders from the Chairman of Vast Resources plc which is set out in Part I of this document. The letter explains the background to and the reasons for the Subscription and the Additional Financing and contains a recommendation from the Board that you vote in favour of the Resolutions. Notice of a General Meeting of the Company, to be held at 2.30 p.m. on 9 February 2016 at the offices of Daniel Stewart & Company Plc, 33 Creechurch Lane, London EC3A 5EB at 2.30 p.m is set out at the end of this document. Shareholders have been provided with a Form of Proxy for use at the General Meeting. The Form of Proxy should be completed, signed and returned to Capita Asset Services, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU as soon as possible and, in any event, so as to arrive not later than 2.30 p.m. on 7 February 2016, or 48 hours before any adjourned meeting. Completion of a Form of Proxy will not preclude a Shareholder from attending and voting at the General Meeting in person should they wish to do so. Strand Hanson Limited, which is authorised and regulated in the UK by the Financial Conduct Authority, is acting exclusively for the Company as nominated adviser and no one else (including the recipients of this document) in connection with the matters described in this document and will not be responsible to anyone other than the Company for providing the protections afforded to customers of Strand Hanson Limited or for advising any other person in connection with the matters described in this document. Strand Hanson Limited makes no representation, express or implied, with respect to the accuracy or completeness of any information contained in this document and accepts no responsibility for, nor does it authorise, the contents of, or the issue of this document, or any other statement made or purported to be made by the Company, or on its behalf, in connection with the Company or any of the other matters described in this document and accordingly to the fullest extent permitted by law disclaims all and any liability whatsoever whether arising out of tort, contract or otherwise which it might otherwise have in respect of this document or any other statement.

2 CONTENTS Page DEFINITIONS 3 KEY STATISTICS 7 EXPECTED TIMETABLE OF PRINCIPAL EVENTS 7 PART I LETTER FROM THE CHAIRMAN OF THE COMPANY 11 NOTICE OF GENERAL MEETING 18 ENCLOSURES Form of Proxy for use at the General Meeting 2

3 DEFINITIONS The following definitions apply throughout this document, unless the context otherwise requires: Act Additional Financing Additional Financing Shares Additional Financing Warrants Admission AIM AIM Rules Articles associate Baita Plai or Baita Plai Polymetallic Mine Black Scholes Conversion Black Scholes Conversion Shares Black Scholes Subscription Price the Companies Act 2006 (as amended) means the subscription for the Additional Financing Shares made on 5 January 2016 for 0.5 million at the Issue Price (together with associated warrants) by the Managers the 62,500,000 Ordinary Shares subscribed for by the Managers pursuant to the Additional Financing the 62,500,000 warrants issued to the Managers as a result of the Additional Financing the admission of the Tranche I Shares and the Additional Financing Shares to trading on AIM becoming effective in accordance with the AIM Rules the market of that name operated by the London Stock Exchange the AIM Rules for Companies governing the admission to and operation of AIM published by the London Stock Exchange as amended from time to time the articles of association of the Company (as amended from time to time) shall in respect of a Manager, bear the meaning ascribed to it in paragraph (c) of the definition of related party in the AIM Rules as if the relevant Manager fell within paragraphs (a) and/or (b) of such definition, or as otherwise publicly disclosed by the Company as being associated companies of a Manager, and associated shall be construed accordingly the Baita Plai polymetallic mine in Transylvania, Romania a subscription by Crede Capital for Ordinary Shares in Vast pursuant to a conversion of Warrants into Ordinary Shares at the Black Scholes Subscription Price in accordance with the Warrant Instrument Ordinary Shares to be issued to Crede Capital pursuant to a Black Scholes Conversion price per new Ordinary Share equal to a deemed nominal value of per Ordinary Share on the Trading Day the Warrant is exercised pursuant to a Black Scholes Conversion Black Scholes Value or the value of a Warrant calculated using the Warrant Conversion Value Black-Scholes model as developed in 1973 by Fischer Black, Robert Merton and Myron Scholes, using the Economic Research Institute s Black-Scholes calculator, where the volatility shall be 135 per cent., the term of the Warrants shall be deemed to be 60 months (regardless of the then actual remaining term of the Warrants), the stock price shall be the closing bid price per Ordinary Share on the Trading Day immediately preceding the Issue Date or the Subsequent Investment Date (the Relevant Closing Share 3

4 Price ) and the option price shall be 130 per cent. of the Relevant Closing Share Price Board or the Directors City Code Closing Share Price Crede Capital or the Investor CREST Enlarged Share Capital FCA Financing Form of Proxy FSMA GBP or General Meeting Group HMRC the directors of the Company, as at the date of this document, whose names are set out on page 8 of this document the City Code on Takeovers and Mergers means the closing bid price per Ordinary Share on the Trading Day immediately prior to the Issue Date and each Subsequent Investment Date, as applicable, as shown by the London Stock Exchange Daily Official List for such Trading Day Crede CG III Ltd, a wholly-owned subsidiary of Crede Capital Group, LLC, a company incorporated in Bermuda and whose registered office is at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda the relevant system (as defined in the Uncertified Securities Regulations 2001 (SI 2001 No 3875)) for the paperless settlement of trades and the holding of uncertificated securities, operated by Euroclear UK & Ireland Limited, in accordance with the same regulations the issued ordinary share capital of the Company as enlarged by the issue of the Tranche I Shares and the Additional Financing Shares the Financial Conduct Authority of the UK the Subscription and the Additional Financing the form of proxy which accompanies this document, for use in respect of the General Meeting the Financial Services and Markets Act 2000 (as amended) and regulations made pursuant thereto Pounds sterling, being the lawful currency of the UK the general meeting of the Company, convened for 2.30 p.m. on 9 February 2016, notice of which is set out at the end of this document, and any adjournment of it together the Company and its subsidiary undertakings Her Majesty s Revenue & Customs Issue Date 4 January 2016 Issue Price London Stock Exchange Managers 0.8 pence per New Ordinary Share London Stock Exchange plc includes the Directors, senior executives and/or consultants of the Company or its subsidiaries who participated in the Additional Financing, including companies or trusts associated with such individuals, further details of which are set out at page 9 of this document 4

5 Manaila or Manaila Polymetallic Mine Notice of General Meeting or Notice Official List Ordinary Shares Press Announcements Prospectus Rules the Manaila polymetallic mine in Suceava County, Northern Romania the notice convening the General Meeting as set out at the end of this document the Official List of the UKLA the 1,877,345,366 ordinary shares in the capital of the Company in issue as at the date of this document means the press announcements issued by the Company on 4 January 2016 and 6 January 2016, with details of the Subscription and the Additional Financing respectively the rules made by the FCA pursuant to sections 73A(1) and (4) of FSMA Record Date 6.00 p.m. on 7 February 2016 Registrar Regulatory Information Service Relevant Closing Share Price Remin Relevant Securities Resolutions Shareholders Strand Hanson Subscription Subscription Agreement Subscription Shares Subsequent Investment Dates Capita Asset Services PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU a service approved by the London Stock Exchange for the distribution to the public of AIM announcements and included within the list on the website of the London Stock Exchange has the meaning given within the definition of Black Scholes Value or Warrant Conversion Value above S.C Remin SA, a Romanian State mining company which is currently in administration and which holds the largest number of non-ferrous mining licences owned by the state Ordinary Shares and/or rights to subscribe for or convert any security into Ordinary Shares the resolutions to be proposed at the General Meeting as set out in the Notice of General Meeting the registered holders of ordinary shares in the capital of the Company Strand Hanson Limited, a company incorporated in England and Wales with registered number , whose registered office is at 26 Mount Row, London W1K 3SQ, the Company s nominated and financial adviser the subscription on the terms agreed between the Company and Crede Capital pursuant to the Subscription Agreement the agreement dated 4 January 2016 between the Company and Crede Capital relating to the Subscription means the Ordinary Shares subscribed for and to be subscribed for by Crede Capital pursuant to the Subscription Agreement, including the Tranche I Shares means each 90 day anniversary of the Issue Date, or, if any such date is not a Trading Day, the next following Trading Day, and save as varied in accordance with the Subscription Agreement 5

6 Trading Day Tranche I Shares Tranche I Warrants UK UKLA US$, USD or Dollar Vast or Company Warrants Warrant Instrument means a day on which dealings in domestic equity market securities may take place on AIM the 156,250,000 Subscription Shares issued to the Investor, conditional on Admission, on the Issue Date the 156,250,000 Warrants issued to the Investor on the Issue Date the United Kingdom of Great Britain and Northern Ireland the FCA acting in its capacity as the competent authority for the purposes of Part VI of FSMA United States of America ( USA ) dollars, being the lawful currency of the USA Vast Resources plc, a company registered in England and Wales with company number means the warrants to subscribe for Ordinary Shares issuable under the Warrant Instrument, including the Tranche I Warrants means the warrant instrument dated 4 January 2016 constituting the Warrants 6

7 KEY STATISTICS Issue Price 0.8 pence Number of existing Ordinary Shares in issue as at the date of this document 1,877,345,366 Number of Tranche I Shares issued 156,250,000 Number of Additional Financing Shares issued 62,500,000 Enlarged Share Capital (following the issue of the Tranche I Shares 1,877,345,366 and the Additional Financing Shares) Market capitalisation of the Company at the Issue Price Percentage of the Enlarged Share Capital represented by the Tranche I Shares* Percentage of the Enlarged Share Capital represented by the Additional Financing Shares Estimated gross proceeds of the Subscription and the Additional Financing million 8.32 per cent per cent. 5.5 million EXPECTED TIMETABLE OF PRINCIPAL EVENTS Date of publication of this document 20 January 2016 Last date and time for receipt of Forms of Proxy 2.30 p.m. on 7 February 2016 General Meeting 2.30 p.m. on 9 February 2016 If any of the details contained in the timetable above should change, the revised times and dates will be notified to Shareholders by means of a Regulatory Information Service announcement. References to time in this document and the Notice of General Meeting are to Greenwich Mean Time. * Because the total number of Subscription Shares and Warrants to be issued (other than the Tranche I Shares) is variable, it is not possible to show the Subscription Shares and/or Warrants as a percentage of total issued share capital. 7

8 DIRECTORS, SECRETARY AND ADVISERS Directors Registered and Head Office Nominated and Financial Adviser Joint Brokers William Battershill (Non-Executive Chairman) Roy Pitchford (Chief Executive Officer) Roy Tucker (Finance Director and Company Secretary) Eric Diack (Non-Executive Director) Graham Briggs (Non-Executive Director) Nettlestead Place Nettlestead Maidstone Kent ME18 5HA Strand Hanson Limited 26 Mount Row London W1K 3SQ Daniel Stewart & Company Plc 33 Creechurch Lane London EC3A 5EB Dowgate Capital Stockbrokers Limited Talisman House Jubilee Walk Three Bridges Crawley RH10 1LQ Solicitors to the Company Financial Public Relations Registrars Charles Russell Speechlys LLP 5 Fleet Place London EC4M 7RD St Brides Partners Ltd 3 St Michael s Alley London EC3V 9DS Capita Asset Services PXS The Registry 34 Beckenham Road Kent BR3 4TU 8

9 SHAREHOLDINGS IN THE COMPANY Directors and Managers Shareholdings (including associates) Percentage holding Number of following Additional issue of Shareholding Financing Tranche I Number of prior to the Shares Shares and Additional Additional subscribed Additional Financing Financing for Financing Warrants William Battershill 1 28,750, Sapi River Investments Limited 2 196,811,885 20,833, ,833,375 (associated with William Battershill) Roy Pitchford Fermain Limited 3 13,803,200 5,208, ,208,313 (associated with Roy Pitchford) Roy Tucker 26,398,717 5,208, ,208,312 Eric Diack Graham Briggs 4,166, ,166,625 WES Capital (Pte) Ltd 4 20,833, ,833,375 (associated with Pierre Joubert) Total 265,764, ,500, ,500, Ordinary Shares held by William Battershill and his wife. 2 Sapi River Investments Limited is a company owned by a trust associated with William Battershill but where he has no beneficial or controlling interest. 3 Fermain Limited is a company owned by a trust associated with Roy Pitchford, but where he has no beneficial or controlling interest. 4 WES Capital (Pte) Ltd is a company owned by a trust of which Pierre Joubert, Chief Financial Officer, is a beneficiary. 5 Totals include a further 6,250,000 Additional Financing Shares subscribed for by senior employees and/or consultants, who were also issued 6,250,000 Additional Financing Warrants. 9

10 PRESENTATION OF INFORMATION Forward Looking Statements Some of the statements in this document about the Company include forward-looking statements which reflect the Directors current views with respect to financial performance, business strategy, plans and objectives of management for future operations. These statements include forward-looking statements both with respect to the Company and the sectors and industries in which it operates. Statements which include the words expects, intends, plans, believes, projects, anticipates, will, targets, aims, may, would, could, continue, and similar statements are of a future or forward-looking nature. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause the Company s actual performance to differ materially from that indicated in these statements. Any forward-looking statements in this document reflect the Directors current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the Company s operations, results of operations, growth strategy and liquidity. These forward-looking statements speak only as of the date of this document. Subject to any obligations under the AIM Rules, the Company undertakes no obligation to publicly update or review any forwardlooking statement, whether as a result of new information, future developments or otherwise. All subsequent written and oral forward-looking statements attributable to the Company or individuals acting on behalf of the Company are expressly qualified in their entirety by this paragraph. 10

11 PART I LETTER FROM THE CHAIRMAN OF THE COMPANY Vast Resources plc (Incorporated and registered in England and Wales with registered number ) Directors: William Battershill (Non-Executive Chairman) Roy Pitchford (Chief Executive Officer) Roy Tucker (Finance Director and Company Secretary) Eric Diack (Non-Executive Director) Graham Briggs (Non-Executive Director) Registered Office: Nettlestead Place Nettlestead Maidstone Kent ME18 5HA 20 January 2016 To Shareholders of Vast Resources plc Dear Shareholder, Subscription of up to 5.0 million by Crede Capital Additional Financing of 0.5 million made by the Managers Issue of Associated Warrants Notice of General Meeting 1. Introduction The Board announced on 4 January 2016 entry into an agreement with Crede Capital according to which Crede Capital has agreed to subscribe for new Ordinary Shares and associated Warrants to raise up to 5.0 million. Crede Capital Group, LLC is a U.S.-based family office with a successful record of investing in emerging European growth companies. On 6 January 2016, it was further announced that the Managers, including certain directors of the Company and their associated companies and/or trusts, as permitted by the Subscription Agreement, had agreed to invest an aggregate principal amount of 0.5 million to subscribe for Ordinary Shares at the Issue Price, together with warrants to subscribe for Ordinary Shares exercisable at 1.04 pence each, or otherwise on the same terms as the Warrants, as provided for in the Warrant Instrument and further explained below, at any time until 3 January The Subscription Agreement provides for an investment of up to 5.0 million in the Company through the issue of Ordinary Shares to Crede Capital in four separate tranches, occurring at 90-day intervals, with each tranche being equal to 1.25 million in quantum. 156,250,000 new Ordinary Shares, which make up the first tranche of the Subscription Shares, were issued by the Company to Crede Capital on 4 January 2016, using the Directors existing share issuance authorities, conditional on Admission, at the Issue Price per Ordinary Share, together with 156,250,000 Warrants to acquire Ordinary Shares in the Company exercisable at any time until 3 January 2021 at a price calculated according to the terms of the Warrant Instrument, summarised further below. 62,500,000 new Ordinary Shares were issued by the Company to the Managers on 5 January 2016, using the Directors existing share issuance authorities, conditional on Admission, at the Issue Price per Ordinary Share, together with 62,500,000 warrants to acquire Ordinary Shares, on the same terms as those of the Warrants. Admission of the Ordinary Shares issued to Crede Capital took effect on 8 January Admission of the Ordinary Shares issued to the Managers took effect on 11 January

12 2. Background Each issue of Subscription Shares will be priced at the closing bid price of the Ordinary Shares on the Trading Day prior to the Issue Date and each Subsequent Investment Date, as applicable, of the Subscription Shares. The Investor will also be issued with one (1) Warrant for every one (1) Subscription Share issued. 156,250,000 Investor Warrants were issued by the Company on 4 January 2016 under existing share issuance authorities. Further details on the terms of the Warrants are provided at section 3 below. The Tranche I Shares, Tranche I Warrants, Additional Financing Shares and Additional Financing Warrants were issued within existing share issuance authorities available to the Company. Subsequent issues of Subscription Shares and associated Warrants are conditional, inter alia, on sufficient share issuance authorities being approved by Shareholders. Pursuant to the Subscription Agreement, the Company has committed to using all reasonable endeavours to procure sufficient shareholder authorities are in place to complete the Financing. The Company is also seeking, for the reasons explained on page 16 of this document, the authorities to grant rights to subscribe for or convert any securities into Ordinary Shares in connection with the conversion of rights under the Company s Share Appreciation Rights Scheme and to disapply pre-emption rights in relation to the grant of such rights. The Company is further seeking to refresh its existing allotment authority and to disapply pre-emption rights up to an amount of 500,000 until the next annual general meeting of the Company. A summary of the Resolutions is set out on pages of this document. The Directors have convened the General Meeting at which Shareholders will be asked to consider and, if thought fit, pass the Resolutions. Provided the Company s share price does not fall below an average price of 0.7p prior to and between the Subsequent Investment Dates, the authorities that the Company now seeks will be sufficient to complete the Financing. In the event this were not the case the Company will seek such further share issuance authorities from Shareholders to issue the Relevant Securities at any Subsequent Investment Date as necessary. The purpose of this letter is to provide you with further information on the Financing and the Resolutions seeking, inter alia, the authority to allot shares and to disapply pre-emption rights. This letter also explains why the Board considers that the Financing will promote the success of the Company for the benefit of Shareholders as a whole, and accordingly why the Directors unanimously recommend that Shareholders approve the Resolutions. The need for further financing has arisen partly as a result of the recent major fall in copper and other commodity prices which has reduced cash flow for Manaila Polymetallic Mine, and partly due to the delay in obtaining the licence to operate at Baita Plai Polymetallic Mine. Cash flow from Manaila and from Baita Plai had been calculated to fund a significant part of the Company s capital expenditure and this has now been reduced or delayed. Fortunately, following the delayed completion of the merger between the Company s Romanian subsidiaries, the transfer back of the licence at Baita Plai is now expected very soon. The Financing will enable the Company to pay the sums that have become due on the transfer back of the Baita Plai licence and the further CAPEX required at Baita Plai; and will also enable the completion of the second mill and of the zinc and lead flotation line at Manaila. 3. Reasons to vote in favour of the Resolutions The Financing provides the Company with funding certainty at a key period in its development as it progresses its producing mining projects. The funds may be utilised for general working capital purposes. The Financing is staged to minimise dilution to existing Shareholders, provided the share price is supported by the market, whilst simultaneously providing maximum flexibility to the Company. The Company requires having the appropriate authorities to allot the required Subscription Shares and Warrants to honour the Subscription Agreement entered into with Crede Capital. To breach this requirement would jeopardise the Financing and could result in the Company not being able to complete 12

13 its capital expansion objectives, thus reducing its ability to operate Manaila and Baita Plai at full capacity and preventing additional investment in other projects identified for evaluation. Vast has pursued and investigated a number of funding options. In the current low price climate in the international commodities market and in light of investment sentiment towards the mining sector, funding is difficult to obtain, particularly of the quantum agreed with Crede Capital. The Financing has enabled Vast to proceed with acquiring and bringing into production two expected to be profitable polymetallic mines at a discount, placing the Company in an excellent position to take advantage of the market should commodity prices rise in the future. Developing Manaila and Baita Plai, in an environment of relatively low commodity prices in Romania where a significant portion of the mining sector is shut down, places Vast, the Directors believe, in a good negotiating position to secure further mining assets on advantageous terms. Alternatives to securing the funding from Crede Capital are, in current market conditions, uncertain. Having secured the funding from Crede Capital and the Managers, Shareholder support for the share price is now sought to ensure that the future three tranches of Subscription Shares are issued at increasing, not decreasing, share prices. 4. The Subscription Subscription Agreement Under the terms of the Subscription Agreement, the Company will issue Ordinary Shares to Crede Capital in three further tranches, on each Subsequent Investment Date, with each tranche being equal to 1.25 million in quantum. Crede Capital has, and will also be issued (following the issue of the Tranche 1 Shares on the Issue Date) with one (1) Warrant for every one (1) Subscription Share issued to it. The Subscription Agreement includes warranties from the Company customary for an agreement of this nature and also an indemnity from Vast to Crede Capital in relation, inter alia, to the Company s covenant to Crede Capital that it shall use all reasonable endeavours to ensure that it has sufficient shareholder authorities in place to meet its obligations to allot and/or grant Relevant Securities free of all pre-emptive and other similar rights and restrictions at the relevant times. The Subscription Agreement requires the Company to obtain the consent of Crede Capital to further issues of shares other than pursuant to the Subscription Agreement or in relation to existing publicly disclosed commitments until 90 days after the subscription of the fourth tranche of 1.25 million. There is a carve out for issues of up to 1 per cent. of the issued ordinary share capital (calculated on a fully diluted basis at the date of such issue) in relation to ordinary course licence and asset acquisitions. The Subscription Agreement also permitted the Company to, within two Trading Days of the Issue Date, allot to all or some of the Managers such number of Ordinary Shares at the closing bid price per Ordinary Share on the Trading Day immediately prior to the Issue Date as was, in aggregate, equal to an aggregate purchase price for such Ordinary Shares of 0.5 million and to issue to the relevant Manager one Additional Financing Warrant per Ordinary Share allotted to the relevant Manager to subscribe for Ordinary Shares on the same basis as the Warrants. The allotment and/or grant of Relevant Securities pursuant to the Subscription Agreement and the Warrant Instrument, is conditional, inter alia, on there being sufficient share issuance authorities in place. The Company agreed to convene a General Meeting to be held on or about 9 February 2016 (and subsequent general meetings, if required) to seek authorities to issue Relevant Securities under the terms of the Subscription Agreement. Accordingly, set out at the end of this document, is a Notice of General Meeting to be held at the offices of Daniel Stewart & Company Plc on 9 February 2016 at 2.30 p.m. at which the appropriate Resolutions will be proposed. 13

14 Maximum Investor Holding Under the terms of the Subscription Agreement, the Investor, without the prior written consent of the Company, shall not subscribe for any Subscription Shares on any Subsequent Investment Dates if such subscription would, if completed by the Investor, when aggregated with interests it already then holds pursuant to its holding of Ordinary Shares and Warrants, result in the Investor holding 25 per cent. or more of the Ordinary Shares (calculated on a fully diluted basis). Terms of the Warrants On the Issue Date, one (1) Warrant has been, and at each Subsequent Investment Date, one (1) Warrant will be, issued to the Investor for every one (1) Subscription Share subscribed for. Each Warrant will entitle the Investor to acquire new Ordinary Shares, with a five year exercise period. The terms of the Warrants are covered in full under the Warrant Instrument entered into by the Company. For each Warrant, the Investor may either (i) subscribe for one (1) new Ordinary Share at an exercise price equal to 130 per cent. of the closing bid price on the day prior to the Issue Date or each Subsequent Investment Date; or (ii) subscribe for such number of new Ordinary Shares calculated by dividing the aggregate Black Scholes Value of the Warrants held and to be exercised by the Investor by the closing bid price of Ordinary Shares on the Trading Day two days prior to the date on which the notice of exercise of the Warrant(s) is issued, at a price per Ordinary Share equal to the Black Scholes Subscription Price payable in full on the Trading Day the Warrant is, or Warrants are, exercised. The Company has the right to call the Warrants to be exercised at any time if the Ordinary Share price is trading at a 25 per cent. premium to the exercise price of the Warrants described in part (i) of the above paragraph for a period of 20 consecutive trading days and the average daily trading volume of Ordinary Shares during this period exceeds 200,000 in value. Black Scholes Conversion In the event that Crede Capital elects to undertake a Black Scholes Conversion, the number of Warrants it wishes to convert will be valued at the Black Scholes Value, converted to an equivalent number of Ordinary Shares valued at the applicable closing bid price of the Ordinary Shares on the Trading Day two days prior to the date on which the Investor issues the notice to exercise the Warrant(s), and such number of Ordinary Shares will be issued to Crede Capital and the applicable Warrants cancelled. In such event, Crede Capital will pay the Black Scholes Subscription Price, being the nominal value of per Black Scholes Conversion Share on the Trading Day of the Black Scholes Conversion. The Directors note that the relative economic benefit to Crede Capital of exercising the Warrants for cash versus undertaking a Black Scholes Conversion is dependent on the Company s share price. Assuming the market price of the Ordinary Shares rises, there will be a price at which the economic benefit of a conventional exercise of the Warrants exceeds the economic value received through a Black Scholes Conversion. By way of example, according to the Directors calculations, for the Tranche 1 Warrants the economic value to Crede Capital of conventionally exercising the Warrants exceeds the economic value derived from the Black Scholes Conversion when the market price of the Ordinary Shares exceeds approximately 1.73 pence (at an assumed risk-free rate of 2 per cent. based approximately on the current market rate on 5-year US Treasury Bills). Commission For each subscription of Subscription Shares (including the Tranche I Shares) by Crede Capital, a commission ( Commission ) equal to 10 per cent. of the aggregate purchase price for the relevant Subscription Shares may become payable by the Company to Crede Capital in the event that Crede Capital subsequently subscribes for Black Scholes Conversion Shares, under the terms of the Warrant Instrument. The Commission payable shall not exceed the Black Scholes Subscription Price payable in respect of the Black Scholes Conversion Shares then being issued after deduction of the commission by way of administration fee also payable on such issue (see below). The payment of such Commission is subject to further conditions and payment mechanics as detailed in the Subscription Agreement. In no circumstances will the Commission payable exceed 10 per cent. of the purchase price of the Ordinary Shares to which such Commission relates. 14

15 The Subscription Agreement further provides that in the event that Crede Capital subscribes for Black Scholes Conversion Shares the Company shall also pay to Crede Capital a commission by way of administration fee on the issue of such Black Scholes Conversion Shares equal to 10 per cent. of the Black Scholes Subscription Price payable for such shares. 5. Interim results The Company released its interim results on 31 December 2015 for the six months ended 30 September Romania Operational Update Vast is currently operating the Manaila Polymetallic Mine at a rate of ten thousand tonnes of ore mined and processed per month. With an installed capacity of twenty thousand tonnes of ore mined and processed per month, the plan is now to commission the second milling and flotation circuit which, subject to the passing of the Resolutions, is expected to be completed by the end of March. On completion, Manaila will produce separate copper and zinc concentrates, both at better grades and quality. Having recently renewed the licence at Manaila, application has been submitted to expand the licence perimeter to facilitate the evaluation of the potential to extend the life of the open cut mine. The geology of the area suggests that the ore body continues beyond the current perimeter. Having completed some of the preparatory work at Baita Plai and in anticipation of receiving the licence in the near future as a consequence of completing all the necessary regulatory and legal requirements for the issue of the licence, work to reopen the mine will commence. Initial production is planned at ten thousand tonnes per month of ore through the mill and flotation circuit, utilising two of the three installed mills and parts of the four installed flotation circuits. Thereafter, following re-commissioning of the third mill and full utilisation of the installed flotation circuits, the monthly production is expected to increase to twenty thousand tonnes per month utilising the current installed capacity. Funding, adequate personnel, and time permitting, additional identified projects in Romania will be evaluated, including the mining assets of Remin. 7. About Crede Capital 6 Crede Capital Group, LLC is a family office located in Los Angeles, New York and Beijing, providing capital in U. S., Canadian, European, Australian and Asian markets directly to small-cap public companies with market capitalizations below US$1.0 billion. Since its inception in 2009, Crede Capital Group, LLC has completed approximately 115 transactions committing in excess of US$900 million in capital. Crede Capital Group, LLC is a passive investor and does not seek board seats or control positions. Crede Capital Group, LLC is focused on life sciences, healthcare, energy, natural resources, media, social media, technology and special situations. 8. Related Party Transaction(s) The Subscription As a result of the Subscription, Crede Capital may become a substantial shareholder in the Company as defined in accordance with the AIM Rules and consequently the Subscription may oblige the Company to enter into Related Party Transaction(s) under the AIM Rules. Accordingly, the Company s independent directors (being, for the purposes of the Subscription, the entire Board) consider, having consulted with the Company s nominated adviser, Strand Hanson, that the terms of the Subscription are fair and reasonable insofar as the Company s shareholders are concerned. 6 Based on information provided to the Company by Crede Capital. 15

16 Additional Financing The Additional Financing is classified as a Related Party Transaction in accordance with the AIM Rules. Accordingly, the Company s independent director for the purpose of considering the Additional Financing, being Eric Diack, considers, having consulted with the Company s nominated adviser, Strand Hanson, that the terms of the Additional Financing are fair and reasonable insofar as the Company s shareholders are concerned. 9. General Meeting Set out at the end of this document is the Notice of General Meeting convening the General Meeting to be held at the offices of Daniel Stewart & Company Plc at 2.30 p.m. on 9 February 2016 at which the Resolutions described below will be proposed. Authority to grant relevant securities pursuant to the Subscription Agreement An ordinary resolution (Resolution 1) is being proposed in order to authorise the Directors to grant Relevant Securities to Crede Capital or its nominees in connection with the Subscription in accordance with section 551 of the Act up to an aggregate nominal value of 1,071,429. The section 551 authority granted therein will expire 12 months from the passing of the Resolution. Authority to allot relevant securities under the Company s share appreciation rights scheme (SARS) An ordinary resolution (Resolution 2) is being proposed in order to grant authority in accordance with section 551 of the Act to the Directors to allot Relevant Securities up to an aggregate nominal value of 250,000 to satisfy awards of the Company to executives pursuant to the Company s Share Appreciation Rights Scheme. The section 551 authority granted therein will expire 12 months from the passing of the Resolution. General authority to allot relevant securities An ordinary resolution (Resolution 3) is being proposed in order to grant general authority in accordance with section 551 of the Act to the Directors to allot Relevant Securities (other than pursuant to Resolutions 1 and 2) up to an aggregate nominal value of 500,000. The section 551 authority granted therein will expire at the conclusion of the next annual general meeting of the Company. Disapplication of pre-emption rights The provisions of section 561(1) of the Companies Act to the extent that they are not disapplied, confer on shareholders rights of pre-emption in respect of the allotment of equity securities which are, or are to be, paid up wholly in cash. Accordingly, a special resolution (Resolution 4) is being proposed to disapply statutory pre-emption provisions in connection with the allotment of equity securities to Crede Capital (or its nominees), in connection with the Subscription, up to an aggregate nominal value of 1,071,429. The authority granted therein will expire 12 months from the passing of the Resolution. A special resolution (Resolution 5) is being proposed to disapply statutory pre-emption provisions in connection with the allotment of equity securities pursuant to Resolution 2 up to an aggregate nominal value of 250,000. The authority granted therein will expire 12 months from the passing of the Resolution. A special resolution (Resolution 6) is being proposed to disapply statutory pre-emption provisions in connection with the allotment of equity securities in connection with a Rights Issue (as defined therein) and more generally pursuant to the authority that is sought under Resolution 3, up to an aggregate nominal value of 500,000. The authority granted therein will expire at the conclusion of the next annual general meeting of the Company. 16

17 10. Action to be taken In respect of the General Meeting You will find enclosed with this document a Form of Proxy for use by Shareholders at the General Meeting. Whether or not you intend to be present at the General Meeting, you are requested to complete and return the Form of Proxy in accordance with the instructions printed thereon. To be valid, completed Forms of Proxy must be received by the Registrar as soon as possible and in any event not later than 2.30 pm on 7 February 2016, being 48 hours before the time appointed for holding the General Meeting. Completion of a Form of Proxy will not preclude you from attending the meeting and voting in person if you so choose. 11. Recommendation The Directors believe that the Financing and the passing of the Resolutions are in the best interests of the Company and Shareholders, taken as a whole. The Directors unanimously recommend the Shareholders to vote in favour of the Resolutions as they and their associates have undertaken to do in respect of their own beneficial holdings of Ordinary Shares representing, in aggregate, 301,181,086 Ordinary Shares, being approximately per cent. of the issued ordinary share capital of the Company at the date of this document. William Battershill Chairman 20 January

18 Vast Resources plc (Incorporated and registered in England and Wales with registered number ) NOTICE OF GENERAL MEETING NOTICE IS HEREBY GIVEN that a General Meeting of the Company will be held on Tuesday 9 February 2016 at the offices of Daniel Stewart & Company Plc 33 Creechurch Lane London EC3A 5EB at 2.30 p.m. for the purpose of considering and, if thought fit, passing the following resolutions with Resolutions 1-3 being proposed as ordinary resolutions and Resolutions 4-6 being proposed as special resolutions: Ordinary Resolutions Resolution 1, that the directors of the Company be and they are hereby generally and unconditionally authorised (in substitution for all subsisting authorities to the extent unused and otherwise than granted pursuant to Resolutions 2 and 3) pursuant to and in accordance with section 551 of the Companies Act 2006 (the Act ) to allot shares in the Company and to grant rights to subscribe for or convert any securities into shares in the Company (together relevant securities ) to Crede CG III Ltd or its nominee(s) pursuant to the terms of the Subscription (as defined in the Circular of which this Notice forms part) up to an aggregate nominal amount of 1,071,429 and, unless previously renewed, varied or revoked by the Company in general meeting, this power shall expire 12 months after the passing of this Resolution except that the directors of the Company may, before the expiry of such period, make an offer or agreement which would or might require relevant securities to be allotted after the expiry of such period, and the directors of the Company may allot relevant securities in pursuance of such offer or agreement notwithstanding that the authority conferred by this Resolution has expired. Resolution 2, that the directors of the Company be and they are hereby generally and unconditionally authorised pursuant to and in accordance with section 551 of the Act to allot relevant securities in connection with the grant of awards to directors and officers of the Company under the Company s share appreciation rights scheme up to an aggregate nominal amount of 250,000 for a period expiring (unless previously renewed, varied or revoked by the Company in general meeting) 12 months after the passing of this Resolution except that the directors of the Company may, before the expiry of such period, make an offer or agreement which would or might require any such relevant securities to be allotted after the expiry of such period, and the directors of the Company may allot any such relevant securities notwithstanding that the authority conferred by this Resolution has expired. Resolution 3, that the directors of the Company be and they are hereby generally and unconditionally authorised (in substitution for all subsisting authorities to the extent unused and otherwise than granted pursuant to Resolutions 1 and 2) pursuant to and in accordance with section 551 of the Act to allot relevant securities up to an aggregate nominal amount of 500,000 for a period expiring (unless previously renewed, varied or revoked by the Company in general meeting) at the conclusion of the next annual general meeting of the Company to be held after the date of this Notice except that the directors of the Company may, before the expiry of such period, make an offer or agreement which would or might require relevant securities to be allotted after the expiry of such period, and the directors of the Company may allot relevant securities notwithstanding that the authority conferred by this Resolution has expired. 18

19 Special Resolutions Resolution 4, subject to, and conditional on, the passing of Resolution 1, the directors of the Company be and they are hereby empowered in accordance with section 570 of the Act to allot equity securities (within the meaning of section 560 of the Act) pursuant to the authority conferred upon them by Resolution 1 as if section 561(1) of the Act did not apply to any such allotment provided that this authority shall expire (unless previously renewed, varied or revoked by the Company in general meeting) 12 months after the passing of this Resolution, save that the Company may, before such expiry, make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors of the Company may allot equity securities in pursuance of such an offer or agreement as if this power had not expired. Resolution 5, subject to, and conditional on, the passing of Resolution 2, the directors of the Company be and they are hereby empowered in accordance with section 570 of the Act to allot equity securities (within the meaning of section 560 of the Act) pursuant to the authority conferred upon them by Resolution 2 as if section 561(1) of the Act did not apply to any such allotment provided that this authority shall expire (unless previously renewed, varied or revoked by the Company in general meeting) 12 months after the passing of this Resolution, save that the Company may, before such expiry, make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors of the Company may allot equity securities in pursuance of such an offer or agreement as if this power had not expired. Resolution 6, subject to, and conditional upon, the passing of Resolution 3 the directors of the Company be and they are hereby empowered (in substitution for all subsisting authorities to the extent unused and otherwise than granted pursuant to Resolutions 4 or 5) in accordance with section 570 of the Act to allot equity securities (within the meaning of section 560 of the Act) pursuant to the authority conferred upon them by Resolution 3 for cash as if section 561(1) of the Act did not apply to any such allotment, provided that this power shall be limited to the allotment of equity securities: 6.1 in connection with an offer of such securities by way of a Rights Issue; and 6.2 otherwise than pursuant to 6.1 above, up to an aggregate nominal amount of 500,000; provided that this authority shall expire (unless previously renewed, varied or revoked by the Company in general meeting) at the conclusion of the next annual general meeting of the Company, save that the Company may, before such expiry, make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors of the Company may allot equity securities in pursuance of such an offer or agreement as if this power had not expired. In this Resolution, Rights Issue means an offer of equity securities open for acceptance for a period fixed by the directors of the Company to Shareholders on the register on a fixed record date in proportion as nearly as may be to their respective holdings, but subject to such exclusions or other arrangements as the directors of the Company may deem necessary or expedient to deal with any fractional entitlements or legal or practical difficulties under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory. Dated: 20 January 2016 Registered Office: Nettlestead Place Nettlestead Maidstone Kent ME18 5HA BY ORDER OF THE BOARD Roy Tucker, Secretary 19